Amazon Files Motion to Dismiss FTC Antitrust Lawsuit

Attorneys representing Amazon have requested the dismissal of the antitrust lawsuit filed by the Federal Trade Commission (FTC) in September. In a 31-page filing submitted to a federal court in Washington state, the e-commerce giant argued that the agency is attacking policies that benefit consumers and competition.

The FTC, joined by 17 states, accused Amazon of engaging in anti-competitive practices in the "online superstore market" and online marketplace services. The complaint alleged that the company inflates prices and stifles competition by discouraging third-party sellers from offering lower prices on non-Amazon sites. The agency claimed that Amazon buried listings of lower-priced products and charged merchants increasingly higher fees, resulting in higher prices on its own platform.

However, Amazon countered these allegations, stating that the conduct labeled anti-competitive by the FTC actually consists of common retail practices that benefit consumers. The company emphasized its commitment to featuring competitive prices and promptly matching rivals' discounts. It argued that these practices are essential for healthy competition and ultimately benefit consumers.

Amazon also addressed the accusation that it conditions Prime eligibility, denoting fast shipping, on sellers using its fulfillment service, Fulfillment by Amazon. The company denied this claim and asserted that it faces competition from a wide range of retailers, both online and brick-and-mortar.

Another point of contention in the lawsuit was Amazon's alleged use of an algorithm called “Project Nessie” to raise prices and have other shopping sites follow suit. The FTC claimed that this tool allowed Amazon to predict where it could raise prices and maintain them after other platforms adjusted their prices accordingly. Amazon admitted to experimenting with an automated pricing system called Nessie in the past, but stated that it was intended to match the second-lowest competitor's price for limited products and duration. The company asserted that it discontinued these experiments in 2019 and now matches its prices to the lowest available.

The outcome of Amazon's motion to dismiss the lawsuit remains to be seen. However, the case has significant implications for the e-commerce industry and the regulation of online marketplaces. The court's decision will determine whether the FTC's allegations against Amazon hold merit and may potentially shape future antitrust enforcement efforts in the sector.